The suit, filed Monday in Anchorage Superior Court, deals with the company's new "Voice Connect" service, which allows users to dial numbers by speaking into the phone. The state contends that customers had to opt out of the service if they did not want to be billed, but the company says that's not the case.

The lawsuit asks the court to block ACS from engaging in opt-out marketing in the future, refund customers' money and pay civil penalties of $5,000 for each consumer who was a target of the promotion.

Pease said ACS offered a month's worth of the Voice Connect service free to all customers in May. She said the company originally told customers they would have to opt out to avoid incurring charges, but then changed the policy.

"We would never charge a customer - and we haven't - for the service unless they went through the procedure and activated it," Pease said.

A customer must set up and use the service in order to activate it. To use Voice Connect, customers in Juneau, Anchorage and Fairbanks must dial a code. In Juneau, that code is #77.

"You have to know what you're doing and be familiar with it and actually have read the mailing propaganda," Pease said. "It's not something that you could just automatically do."

If a customer activated the service, they were billed $2 per month after the free period ended. Pease argued that the service wasn't a true "negative opt-out" service because consumers who never used the service didn't have to opt out. She said ACS has already refunded the $2 charge to all customers who complained.

But Ed Sniffen, an assistant attorney general, said the state received complaints from customers who said they were not aware that they had the service and that they didn't want it. He said it's clear from the fact that customers had to complain to receive a refund the promotion was a negative opt-out promotion.

"Somebody had to do something to either get their money back or to stop the service. Our position is that the consumer should never have to do anything to not have to receive or pay for a service they didnt expressly authorize," Sniffen said.

Pease said ACS is reviewing its legal options, but denies any wrongdoing.